Accounts and Reports

GAAP POLICY AND PROCEDURE MANUAL

• Budgetary comparison schedules should be presented as Required Supplementary Information (RSI) for the general fund and for each major special revenue fund that has a legally adopted annual budget. The budgetary comparison schedule should present both (a) the original and (b) the final appropriated budgets for the reporting period as well as (c) actual inflows, outflows, and balances, stated on the government's budgetary basis. A separate column to report the variance between the final budget and actual amounts is encouraged but not required. Governments may also report the variance between original and final budget amounts.
  1. The original budget is the first complete appropriated budget. The original budget may be adjusted by reserves, transfers, allocations, supplemental appropriations, and other legally authorized legislative and executive changes before the beginning of the fiscal year. The original budget should also include actual appropriation amounts automatically carried over from prior years by law. For example, a legal provision may require the automatic rolling forward of appropriations to cover prior-year encumbrances.
  2. The final budget is the original budget adjusted by all reserves, transfers, allocations, supplemental appropriations, and other legally authorized legislative and executive changes applicable to the fiscal year, whenever signed into law or otherwise legally authorized. GASB 34 Paragraph 130.
• Governments may present the budgetary comparison schedule using the same format, terminology, and classifications as the budget document, or using the format, terminology, and classifications in a statement of revenues, expenditures, and changes in fund balances. Regardless of the format used, the schedule should be accompanied by information, either in a separate schedule or in notes to Required Supplementary Information (RSI), that reconciles budgetary information to GAAP information, as discussed in NCGA Interpretation 10, as amended by this Statement. Notes to RSI should disclose excesses of expenditures over appropriations in individual funds presented in the budgetary comparison, as discussed in NCGA Interpretation 6, paragraph 4, as amended by GASB 34 Paragraph 131, as further amended by GASB 37 Paragraph 19.

• The budget is not included in STARS.
• Included in the statistical section of the prior Annual Financial Report is a Combined Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget Basis (for the general fund only). This schedule includes both budget and actual columns.

• Identify funds subject to legal budget.
• Identify basis of accounting used in budget.
• Determine methods used to amend original budgets.
• Develop methods to capture budgetary data.
• Select reporting option (Required Supplementary Information or Basic Financial Statement).
• Determine schedule format option (Same as budget document or same as fund financial statements).
• Reconcile budgetary to the fund GAAP information.
• Obtain policies from the Division of Budget.

• Identify funds subject to the legal budget.
• Budgetary basis of accounting.
• Use of encumbrances.
• Legal level of budgetary control.
• Budget amendment process.
• Any excess of expenditures over appropriations.
• Any supplemental appropriations.

• Some expenditures are appropriated by the State Legislature WITH legal limitations.
  • Can be modified by the State Legislature
  • The legal level of budgetary control is the cumulative total of appropriations
• Some expenditures are appropriated by the State Legislature WITHOUT legal limitations.
  •  Can be modified by the agencies' executive management subject to availability of funds
• The appropriation file layout in STARS includes the following fields:
  • Agency #
  • Budget fiscal year
  • Transaction year
  • Firm Encumbrances
  • Contingent Encumbrances
  • Appropriation - Original and supplemental legislative appropriations
  • Reappropriation - Prior year appropriation balance reappropriated and authorized for expenditure in the current year
  • Revision - Adjustment to appropriations
  • Reserve - Prior year balance reappropriated but not authorized for expenditure in the current year unless state finance council approval is given.
  • Net Transfer - Appropriation transferred into or out of the account by authorization of the legislature or executive directives
  • Reversion - Appropriation lapsed for the fiscal year
• Budgetary expenditures include the following accounts:
  • 5001 - expenditures - with current budget fiscal year
  • 5002 - firm encumbrances - with current budget fiscal year
  • 5003 - contingent encumbrances - with current budget fiscal year
• Cancellation of prior year encumbrances can be computed as follows (used 99 cancellations as an example):
  • Start with the amount of encumbrances outstanding at 6-30-98
  • Subtract the amount of expenditures with a transaction year of 99 and a budget fiscal year of LESS THAN 99 (this would represent the payments made in 99 on the 98 encumbrances)
  • Subtract the amount of encumbrances outstanding at 6-30-99 that have a budget fiscal year of LESS THAN 99 (this would represent the prior year encumbrances still outstanding)
  • The result would be the prior year encumbrances cancelled
• When an encumbrance is no longer needed (because either the item will not be purchased, or the purchase price was less than the encumbrance), the following entry is made in STARS:
  • Debit 3002 (fund balance reserved for encumbrances)
  • Credit 5002 or 5003 (encumbrances)

• Budgetary schedules for the general fund and the appropriate major funds will be included in the CAFR as required supplementary information.
• Budgetary schedules for nonmajor funds will be in a separate document published by the Division of Budget.